An Analysis of Income Mobility of the Finnish Elderly after Retirement

Irene Ferro, University of Florence
Gustavo De Santis, University of Florence
Pekka Martikainen, University of Helsinki

Because of the increasing number of older people in all western societies, the relationship between low income, retirement and household characteristics is of interest for both policy and scientific reasons. The Finnish population too has become considerably older in the last century. Our analysis aims at studying, for the older Finnish population, if and how income changes in the years after retirement, distinguishing between marginal changes (i.e. statistically significant, but below a given threshold), transitory changes (change is substantial, but does not persist over time) and permanent changes, meaning both substantial and persistent. Changes in family composition are an important explanatory component of income mobility in old age. Namely, subgroups with little or no change in their living mainly have a linear income trajectory. In contrast, older individuals who experienced changes in household composition are more likely to follow ‘Zigzag’ equivalent income trajectories.